GULF

 

Dec 28 - Jan 05, 2003

 

1.INTERNATIONAL

2. INDUSTRY

3. FINANCE

4. POLICY

5. TRADE

6. GULF

 

WAR THREAT SENDS OIL PRICE HIGHER

Oil prices have continued to climb as US threats to start a war in Iraq and a national strike in Venezuela have unsettled the markets.
In thin trade before the Christmas break, benchmark Brent crude oil closed at $29.60 at 1230 GMT after trading as high as $29.80, just shy of the $29.88 post-September 11 peak.

"Traders are already fretting about the possibility of a strike on Iraq and a Venezuelan dispute overlapping," , said Lawrence Eagles at GNI.

US crude oil prices rose to $32 a barrel for the first time in almost two years on Monday.

London's International Petroleum Exchange, the world's leading oil market, reopens for business on Friday for a shortened session.

Fears of war were heightened when an Iraqi plane shot down and unmanned US Predator spy plane in Iraq's southern no-fly zone.

On Monday, US Defence Secretary Donald Rumsfeld stoked up global tension by threatening North Korea with military action, suggesting a two-front war.

Oil prices were also driven by events in Venezuela where a strike by right-wing business groups and unions against leftist President Hugo Chavez' rule has entered its fourth week.

Mr Chavez said his administration had restarted oil output and exports but the state-owned oil company Petroleos de Venezuela (PDVSA) said production had fallen to less than 7% of November levels.

Talks between the two sides have been suspended until Thursday.

Venezuela, the world's fifth largest oil exporter, normally supplies more than 13% of US oil imports.

DEAL WITH OIL MAJORS WITHIN 2 MONTHS

Saudi Arabia hopes to close within the next two months a deal with foreign oil majors over multi-billion-dollar gas projects stalled for more than a year, the country's foreign minister said.

"We have received a generally positive response from the third consortium," which is led by Royal Dutch/Shell, and includes TotalFinaElf and Conoco, to develop the Shaybah fields, Prince Saud al-Faisal said.

"Only one point remains to be sorted out. We hope this point will be dealt with and, if this happens, we will sign the deal," said Prince Saud, who heads the ministerial committee conducting talks with the foreign oil companies.

"There are indications that the response of the first consortium will be positive. We expect to reach a clear result within the next two months," he told a press conference.

The first and second consortia to develop the South Ghawar and the Red Sea fields are led by ExxonMobil.

BP Amoco and Phillips Petroleum were chosen in the South Ghawar and Occidental and Marathon in the Red Sea group.

The Saudi government made a final offer to the companies in early September following a series of negotiations and a meeting between Crown Prince Abdullah bin Abdul Aziz and the CEOs of ExxonMobil and Royal Dutch/Shell.

The firms signed preliminary agreements in June 2001 for the projects expected to require 25 billion dollars of investments. But talks to close a final deal have been stalled with differences on details of the commercial terms.

The projects also include water desalination, power and petrochemical plants.

Prince Saud said the projects are "huge, unprecedented in the region and highly complex," justifying the long time the talks have taken so far.

GOVERNMENTS MUST EXIT BUSINESS: AL GHURAIR

The Arab world's financial system is not sufficiently equipped to absorb the funds coming back from the West, hence it is high time regional governments exit their successful businesses and pave way for their privatisation, according to a leading private sector business personality.

Abdulaziz Al Ghurair, CEO of Mashreqbank and one of the top businessmen in the region, said he hoped the Dubai government would free its money from some of the commercially successful businesses so that the funds flowing back to the country find proper avenues of investment.

Around $1 trillion of Arab funds are estimated to be parked outside the region in the form of financial instruments such as securities and bank deposits and other debt instruments, of which over Dh500 billion are said to be from the UAE alone. Saudi Arabia and Kuwait also boast big shares in such funds.

ISRAELI TROOPS KILL 7 IN W.BANK, RE-ENTER BETHLEHEM

Israeli troops shot dead seven Palestinians in raids across the West Bank and swept back into Bethlehem to reimpose a curfew, ending a brief Christmas respite from occupation.

The flurry of Israeli army operations drew vows of revenge from Palestinian militant groups, aggravating hostilities which the United States wants kept in check to help it cultivate Arab support for possible war against Iraq.

In Bethlehem, troops fired teargas at Palestinians shopping near the town centre, ordering them by loudspeakers to return home, and resumed patrols in front of the ancient Church of the Nativity, which Christians revere as Jesus's birthplace.

STAGE SET TO FORM FIRST GULF REINSURANCE FIRM

Representatives of the Gulf insurance industry recently approved the establishment of the first reinsurance company fully owned by the GCC, said Bahraini officials.

Its capital has not been declared though it is expected to cross $300 million, they said.

The firm will be owned by the Gulf private sector and GCC governments will only supervise its operations.

The meeting formed a committee to study the proposal in six months and prepare a feasibility study.

Sixty representatives of regional insurers met to examine a recommendation by GCC commerce ministers to set up the company, following the huge increase in reinsurance premiums after the September 11 attacks.

The ministers had said that setting up the company would reduce dependence of GCC companies on international firms, which have sky-rocketed their prices over the past two years.

CELLPHONES IN ARAB WORLD RISE TO 23.7M

The number of mobile phones in use in the Arab world reached 23.7 million by November, compared to 23.35 million fixed lines over the same period, according to a survey released by Madar Research Group.

The 23.7 million mobile phone subscribers constitute only about eight per cent of the Arab population, compared with a world average of 17 per cent.

At an estimated growth of 52 per cent, the mobile phone subscriber base will cross 24 million by the end of the year, and widen the margin between mobile phones and fixed lines by close to one million.

IRAQ WAR COULD BOOST TERRORISM: RUSSIA

Russia warned that a war on Iraq could distract the world's attention away from the ongoing military campaign in Afghanistan and ease the spread of international terrorism.

"Switching the focus off Afghanistan and shifting it to Iraq may augment the threat of international terrorism which is coming from Afghan territories that are not under Kabul's control," Deputy Foreign Minister Yury Fedotov said while talking to the ITAR-TASS news agency.

IRAN, IRAQ WANT BORDERS OPENED

Iraq and Iran asked the United Nations to authorize opening of borders between the two countries for transfer of goods under the UN oil-for-food programme for Baghdad, officials said.

The crossing point would be the first between longtime enemies Iraq and Iran to be set up under the UN humanitarian programme, which was established in 1996 to enable Baghdad to buy food, medicines and other civilian goods with the proceeds of its oil sales.

IRAQ STOCKPILES FOOD FOR WAR

Iraq said it had boosted food rations to let citizens stock up before a possible war with the United States, and accused U.S. and British planes of bombing civilian targets, including a mosque.

Iraqi Trade Minister Mohammed Mehdi Saleh told that supplies distributed so far should ensure everyone had enough to last three months.

YEMEN, KUWAIT TO SIGN SECURITY PACT

Yemen and Kuwait are preparing to sign a security cooperation agreement, official sources revealed said.

"A security cooperation agreement between Yemen and our brothers in Kuwait is being discussed with Yussef Abdulah Al Aunaizee, Kuwaiti ambassador to Sanaa," a state-run newspaper quoted Mutahar Rashad Al Mesri, Yemeni Deputy Minister of Interior as saying.

BANK MUSCAT ACTS TO CURB BAD LOANS

Bank Muscat, the largest bank in Oman, has taken the lead in identifying the malaise affecting profitability of banks in the region and has initiated steps to arrest it.

Several Omani banks have been victims of bad loans during the past couple of years, especially in the last two years.

Bank Muscat recently conducted a two-day training programme on management of non-performing assets (NPAs) in Muscat for its managers.

NIGER DENIES SELLING URANIUM TO IRAQ

The prime minister of Niger, Hama Hamadou, has admitted that Iraq tried to buy uranium from it in the 1980s, but he said the offer had been rejected.

The US State Department last week accused Baghdad of seeking to procure uranium from Niger for the creation of nuclear weapons, and omitting this from its arms declaration to the United Nations.

IRAQ: UN FINDS NO BANNED WEAPONS

Inspectors visited Baghdad's Technical University Iraq says that after a month of "intrusive, extensive and sometimes aggressive" inspections, the United Nations has found no evidence that Baghdad has weapons of mass destruction.

BLAIR RENEWS CALL FOR MID-EAST PEACE

Blood was spilled in the West Bank on Boxing Day Prime Minister Tony Blair has called on the international community to help implement the plan for peace in the Middle East.

In an article for newspapers in the Arab world, Mr Blair said "the roadmap" for peace, drawn up by the European Union, United States, United Nations and Russia, was a "practical way of setting out the steps to the creation of a Palestinian state, alongside Israel, by 2005".

RUSSIA FORGES AHEAD WITH IRAN REACTOR

Russia and Iran have agreed to speed up the construction of the Islamic republic's first nuclear reactor, in the face of strong American criticism.

Russian Atomic Energy Minister Alexander Rumyantsev and the head of Iran's Atomic Energy Organisation, Gholamreza Aqazadeh, finalised details in Tehran.

POPE WARNS AGAINST IRAQ WAR

Pope John Paul II has made a Christmas plea to avoid a war in Iraq, where UN weapons inspectors have carried out more searches of suspect sites.

In his traditional Christmas Day message, Urbiet Orbi, the pontiff also called for all religions to end the conflict in the Holy Land, describing it as a "senseless spiral of blind violence".

BUSINESS IN BETHLEHEM LIES IN TATTERS

For the first time in living memory the West Bank city of Bethlehem has no tree or decorations in Manger Square this Christmas.

The old stone streets around the Church of the Nativity should have been crowded with tourists.

Workshops should have been turning out olive wood souvenirs ahead of the Christmas rush.

But business has ground to a standstill since the latest bout of unrest broke out just over two years ago.